I work for a large asset
Travel Policies For Flying
Answers
1. Were you directed to reduce it?
2. Do your partners and principals tolerate (and maybe prefer) this arrangement/policy?
3. Is your "cost management review" a real initiative or just a make pretend one? Are your principals SERIOUS about cutting cost?
Cost (expensiveness) is all relative.
What am I driving at? I am guessing (and I can be humongously wrong) that your principals and partners are OKAY with this policy because compared to the revenue (albeit the trend for asset management companies is getting difficult or decreasing), it is peanuts and most importantly......they think it is worth it and worst, they think they are entitled to it.
So even if you KNOW you can reduce it and set a policy that is restrictive, it will encounter pushback. Yes, you may be right on the at least 30% reduction, but the real question is, will your principals/partners allow it?
Personally, I actually have a ceiling of Business Class (upgrades are of course welcome)....no matter how many hour flights.
Asset Management people (yes, a generalization/stereotyping and I do NOT mean all) especially Partners/Principals have a higher standard (perception) of lifestyle. I think you are even lucky a G650 isnt in the budget.
Again, as my standard answer to these types of questions......Company Values.
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Thank you for you reply. I am working on the guidance of benchmarking common practices with the goal of revising our policies to be more in line with industry and our peers.
I absolutely agree that when push comes to shove, the partners will travel in a way that they are comfortable with. There often seem to be more exceptions than rules.
Thank you for your feedback; it is the benchmarking data that will be useful in my analysis for management.
I agree with Emerson -- you can certainly reduce cost with a different policy but will need management buy in. What I'm used to is coach under 6 hours, business class allowed above, first class allowed only on flights over 10 hours. Effectively ensures coach on domestic trips but allows business or first on international travel.
Anon
Which members of your Executive Team have publicly declared (to the partners/ principals) support for the initiative? And by that I mean that they understand (a) why the study is being done (including both objective and subjective factors), (b) that it may lead to a curtailment of current habits and (c) they will stand by the changes once approved, no matter who objects.
Your
It might behoove one to remind all concerned that, particularly in closely held and private entities, there are income
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I looked at IRS Pub 511 and 463 and found no advisory that flying coach or 1st class was "questionable" (obviously it needed to be for business reasons and that a spouse would not necessarily be entitled to be claimed as a business expense). The only explicit statement was if you used air miles or someone else paid you couldn't claim an expense.
Can you quantify your claim?